Starting a Small Food Manufacturing Unit on Residential Land: What Are the Legal Hurdles?

Dear Expert, I have seen many small-scale manufacturing units everywhere in cities and towns. I would like to start a food manufacturing facility (packed food) as an SSI unit (with an annual turnover of less than 5 crores) around Chennai, Tamil Nadu. I have already formed a Pvt Ltd Co. Now, can I build this facility on my own land, which is approved for domestic construction? What kind of limitations do I have to consider for this? Initially, we might employ fewer than 10 people, and we may use machinery for mixing and packing various food items. There is no liquid waste, no noise, and no smoke in this unit. Many people have been saying that I won't get approval for this. I request your expert opinion and advice on this matter. Thank you.

Considerations for Starting a Manufacturing Facility in Tamil Nadu

This may not be the right forum for you to get a correct response. You will find more information on HR-related areas. Many think that just because HR handles the Factories Act, such a forum can also respond to questions on startups.

Essential Approvals and Licenses

1. You need to get MMAD approval for the building construction, specifically mentioning that this will be for commercial and factory purposes.

2. You need to get the Tamil Nadu Pollution Control Board's Consent Order, whether you let out effluent or not. It is mandatory.

3. You will be engaging 10 workers with power, and hence you need to get a license from the Inspector of Factories.

4. You need to get a license from the local authorities for running a factory.

Thanks

Land Use and Legal Considerations for Small-Scale Manufacturing

The use of land is governed by the Master Plan of the area.

Starting a small-scale manufacturing unit on a piece of land approved for residential purposes involves the risk of closure at any time due to several reasons, such as:

1. Objections from neighbors;
2. Non-availability of an electric connection for commercial/industrial purposes;
3. Legal requirements by some licensing departments.

Licenses Required for Food Manufacturing

Manufacturing and/or repacking of packed food requires licenses from:

A. Food and Drug Administration of the State,
B. Registration under the Package Commodity Act from FASII,
C. Approval from the Chief Medical and Health Officer (CMHO),
D. Trade License from the Municipal Corporation or Nagar Nigam,
E. Electric Connection from the area DISCOM,
F. License from the Weights and Measures Department,
G. Registration with the Commercial Taxation Officer for obtaining a VAT Number (Proposed GST).

In light of these considerations, it is suggested that, as far as possible, you should refrain from engaging in such activities in non-approved zones.